Tropical concoctions with names like Mango-a-go-go, Strawberries Wild, Caribbean Passion, Orange Dream Machine, and Razzmatazz may remind you of a carefree day at the beach, but Jamba Juice—the national smoothie chain and purveyor of these fruity smoothie kits—has been undergoing a much less relaxing experience.

Jamba Juice is currently involved in an “all natural” labeling litigation that has spanned almost two years, and counting. The case is Lilly v. Jamba Juice Co., Case No. 13-cv-02998-JST (N.D. Cal.). Plaintiffs initially filed a proposed class action under a variety of consumer-friendly California statutes: the California Consumer Legal Remedies Act, the California False Advertising Law, the California Unfair Competition Law, the California Business and Professional Code, and the California Commercial Code. Last September, Judge Tigar certified a class of all persons in California who purchased one of the above-referenced Smoothie Kit Products. Plaintiffs alleged that the smoothie kits were labeled “all natural” despite containing ascorbic acid, xantham gum, gelatin, steviol glycosides, and modified corn starch. Just last week, Judge Tigar issued an order granting preliminary approval of a class action settlement for injunctive relief in connection with these smoothie kits.

The order granting preliminary approval of the class action settlement first considered whether plaintiffs have standing to obtain injunctive relief, noting the requirement that a plaintiff must allege that a “real or immediate threat exists that she will be wronged again.” The question before the court was whether a plaintiff can ever have standing to seek an injunction against a product she knows to be mislabeled. In line with other California district court decisions cited in the order, Judge Tigar found that plaintiffs do have standing in these situations, because to hold otherwise “would effectively preclude consumers from ever obtaining prospective relief against mislabeling.” Judge Tigar cited decisions finding that the intent of the California Legislature in creating its various consumer protection statutes would be undermined by a contrary holding. Judge Tigar concluded that even when a consumer discovers that a certain representation about a product is false, “she doesn’t know that another, later representation by the same manufacturer is also false. . . .A material representation injures the consumer not only when it is untrue, but also when it is unclear whether or not it is true.” Judge Tigar also noted that “basic economics” supports the notion that the past-purchaser plaintiff will suffer a potential injury in the absence of an injunction.

Notably, the court also found that a willingness to consider a future purchase is sufficient to have standing to represent a 23(b)(2) class. Jamba Juice had previously disputed whether the named plaintiff’s declaration of future intent to purchase the challenged products was sufficient to confer standing, arguing that she lacked a “real and immediate threat of injury” because she didn’t claim a definite intent to make a future purchase of the challenged products.

With respect to the merits of the proposed class settlement, the order first laid out the proposed settlement terms, which require an immediate relabeling of the challenged products and Jamba Juice website to remove any “all natural” description. The settlement does not require a recall or removal of the challenged products from inventory, but rather requires that Jamba Juice no longer print any non-compliant labels for the challenged products after the end of this month. In return, plaintiffs and all members of the settlement class will be prohibited from filing any injunctive action seeking to enjoin defendants from labeling the challenged products containing the challenged ingredients as “all natural.”

The court noted that the Ninth Circuit maintains a “strong judicial policy” favoring the settlement of class actions. The court also noted that trial judges exercise great discretion in deciding to approve or reject settlement proposals, and must be vigilant in evaluating the fairness of proposed settlements. According to the authorities relied on by Judge Tigar, a proposed settlement must appear to be “the product of serious, informed, non-collusive negotiations,” must have “no obvious deficiencies,” must “not improperly grant preferential treatment to class representatives or segments of the class,” and must fall “within the range of possible approval.”

In granting preliminary approval to the proposed 23(b)(2) settlement, Judge Tigar noted the class’s difficulty in showing that they could establish damages on a classwide basis and their failure to present a damages model. Accordingly, a damages class was not certified. The judge was careful to note that “[n]othing in this order should be read as a comment on the ability (or lack of ability) of plaintiffs in other consumer cases to demonstrate classwide damages when the request is supported by an adequate damages model.”

Finally, the court addressed the issue of notice to absent class members. While noting that the Ninth Circuit does not appear to have directly addressed the issue of whether class notice is required when a 23(b)(2) class action is settled, the court relied on the reasoning of a 2012 S.D.N.Y. case to find that class notice is not necessary here because, “even if notified of the settlement, the settlement class would not have the right to opt out from the injunctive settlement, and the settlement does not release the monetary claims of class members.”

The Maryland state Senate chamber was abuzz last week on a topic that we frequently write about here at the Monitor–hydraulic fracturing, or “fracking.” Fresh off the heels of former Maryland Governor Martin O’Malley’s decision to permit fracking in the state (subject to significant regulation), Senate Democrats are attempting to push through legislation that would implicitly, if not expressly, impose strict liability on drilling companies.

At issue is Senate Bill 458, sponsored by Senator Robert A. “Bobby” Zirkin, D-Baltimore County. As originally drafted, the bill likely could not be more draconian. Among other things, the legislation would (1) impose strict liability on a drilling company for “any injury, death, or loss to person or property that is caused by the hydraulic fracturing activities”; (2) remove as a defense any argument that a company complied with industry standards, state or federal law, or the conditions of any permit issued to the permittee by a state or federal agency; and (3) create a rebuttable presumption that the hydraulic fracturing activities of the permittee are the proximate cause of any injury, death, or loss to person or property alleged if the plaintiff is located within a certain proximity of the drilling activity.

As Drew Cobbs, executive director of the Maryland Petroleum Council, put it — “This would be the strictest liability bill of anywhere in the country regarding hydraulic fracturing . . . The intent is, in essence, to stop or essentially ban [hydraulic fracturing] in Maryland.” Parts of Maryland sit atop the Marcellus shale, and a Towson University study found that fracking in the Marcellus shale could generate billions of dollars into the western Maryland economy.

As recently reported, there was a frenzied Senate debate over the language of the bill, with particular opposition coming from legislators from western Maryland. While a Senate committee ultimately struck the “strict liability” language from the bill, they inserted a description of the process as “an ultra-hazardous and abnormally-dangerous activity.”

Of course, as many may remember from their law school days, “ultra-hazardous and abnormally-dangerous” are legal terms of art that typically form a basis for imposing strict liability in the first place. Indeed, the Senate decided to seek the state attorney general’s opinion on the legal significance of such language. Not surprisingly, the AG’s office weighed in with an opinion that such language would in fact trigger strict liability:

You asked “if ‘abnormally dangerous’ or ‘ultrahazardous activity’ is another way of saying ‘strict liability’ or does it even relate to strict liability”? As I explain below, strict liability is a tort theory that imposes liability on a party without the need to show negligence. Maryland, like most if not all states, has adopted the legal doctrine of strict liability for ultrahazardous or abnormally dangerous activities, The bill defines hydraulic fracturing as an ultrahazardous or abnormally dangerous activity, thus imposes liability on a person who holds a permit to conduct hydraulic fracturing if the injured person proves the activity caused the harm, regardless if the permit holder exercised reasonable care.

Thus, removing the words “strict liability” from the bill and replacing them with “abnormally dangerous and ultrahazardous” is very much a distinction without a difference. Given that fracking has been around for quite a while, the bill would appear to be driven more by politics than sound policy or science. We will keep an eye on developments relating to this controversial bill in Maryland and report on them at the Monitor.

Back in 2013, I blogged on a Pennsylvania federal court’s dismissal of a doctor’s complaint challenging the state’s so called “Medical Gag Act,” which aimed to prohibit the disclosure of the chemicals and fluids used by oil and gas companies during fracking operations. Specifically, the renal doctor, Dr. Rodriquez, argued that the state’s Medical Gag rules interfered with his ability to properly diagnose and treat his patients and restricted the free exchange of information required of him under the ethical obligations imposed by the medical profession.

As set forth in my previous post, in October 2013, the District Court dismissed the doctor’s complaint for lack of standing. There, the court explained that to satisfy Article III’s standing requirements, Dr. Rodriquez was required to show: 1) he suffered an injury-in-fact that was a) concrete and particularized and b) actual and imminent; 2) the injury was fairly traceable to the challenged action of the Defendants; and 3) it was likely, as opposed to merely speculative, that the injury would be redressed by a favorable decision. The District Court found that Dr. Rodriquez’s injury was “too conjectural” and “hypothetical” to meet the injury-in-fact element for standing. The Court explained that he failed to assert he had been in a situation where he needed the information or even attempted to obtain the information when treating his patients. Furthermore, he did not claim that he was forced to sign a confidentiality agreement under the Act. As a result of that dismissal, Dr. Rodriquez amended his complaint, which was again dismissed in late June 2014 for lack of standing.

Dr. Rodriquez appealed to the Third Circuit, arguing that the District Court erred in finding he did not have standing to proceed. Dr. Rodriquez emphasized that expert testimony at trial would establish that the Act interfered with his ability to diagnose and treat his patients and would also establish that he is ethically prohibited from signing any confidentiality agreements imposed by the Medical Gag rules. Just recently, the Third Circuit issued a decision affirming the District Court’s finding that Dr. Rodriquez had failed to show an injury-in-fact required for standing. Notably, the Third Circuit found it insufficient to allege, as Dr. Rodriquez had, that expert testimony would substantiate his claims later at trial. Furthermore, while Dr. Rodriquez relied on a Pennsylvania state case finding that doctors have standing to challenge the Act, the Third Circuit emphasized that such reliance was misplaced where the issue was federal – not state – standing requirements.

As always, we will continue to monitor and report on notable fracking related issues.

Here at the Monitor, we keep a close eye on the evolution and enforcement of the False Claims Act (“FCA”). Seehere. In that vein, two recent circuit court of appeals cases limiting the interpretation of the Act’s “public disclosure bar” are worth examining.

The FCA imposes civil liability on defendants where false or fraudulent claims for payment are presented to the government. 31 U.S.C. § 3729(a)(1). The FCA authorizes relators—private party whistleblowers—to bring civil qui tam actions in the government’s name and collect a share of the judgment if successful. Id. at § 3730(b)(1). As a preliminary matter, a relator seeking to bring a qui tam action must first disclose her claims to the government, offering an opportunity to intervene. Thus, a relator may proceed in litigating the action independently only if the government chooses not to intervene.

Under the FCA, section 3730(e)(4) removes non-intervened qui tam suits from the court’s jurisdiction where the allegations or transactions described in the complaint were previously publicly disclosed. However, two recent decisions from the Fourth and Sixth Circuits have narrowed the scope of what constitutes “public disclosure.”

The Fourth Circuit introduced the procedural history of U.S. ex rel Wilson v. Graham County Soil & Water Conservation District—a case alleging FCA violations brought by a former employee against county soil and water conservation district—as a “long and winding road” that involved “two trips to the Supreme Court.” 777 F.3d 691, 693 (4th Cir. 2015). That road ended when the Fourth Circuit rejected the Seventh Circuit’s interpretation and instead held that a “public disclosure requires that there be some act of disclosure outside of the government.” Id. at 697 (emphasis in original) (internal citation omitted). In Wilson, defendants argued that a prior Audit Report and USDA Report were disclosed to state and local government agencies as well as federal agencies. Id. at 696-98. Nevertheless, invoking the Tenth Circuit’s reasoning, the Fourth Circuit agreed that “the Government is not the equivalent of the public” and no evidence existed in the record to suggest “that either report actually reached the public domain.” Id.

A Sixth Circuit iteration of Wilson resulted in a similar holding and rejection of Seventh Circuit precedent. The relator in Whipple v. Chattanooga-Hamilton County Hospital Authority alleged that the defendant hospital knowingly submitted false claims for reimbursement to federally funded healthcare programs, which he identified by “analyzing past billing data, reviewing patient records, and observing operations in each of the revenue cycle departments.” 2015 WL 774887, at *1 (6th Cir. Feb. 25, 2015). Prior to this time, the government had conducted an audit and investigation into concerns of improper billing and that investigation was resolved without a hearing in September 2009. Id. Relator disclosed his qui tam claims to the United States a year later in October 2010. The district court held that there was public disclosure of fraud through this prior administrative audit and investigation of the improper inpatient billing practices. See Whipple v. Chattanooga-Hamilton Cnty. Hosp. Auth., 2013 WL 4510801, at *5 (M.D. Tenn. Aug. 26, 2013). The Sixth Circuit reversed, concluding that disclosure of information to the government in the administrative audit and investigation did not constitute a public disclosure triggering the public disclosure bar. Whipple, 2015 WL 774887, at *6. In addition, the Court further restricted its interpretation of “public” in a footnote holding that “[Freedom of Information Act] documents do not constitute public disclosures under the FCA until they are requested and received by someone.” Id. at n. 8 (emphasis added).

The Wilson and Whipple decisions will likely expand the number of FCA qui tam actions that may be maintained, despite prior government audits and investigations. Furthermore, they appear to support the trend of growing FCA cases that we have noted over the past several years. See article.

Lastly, these recent circuit court of appeals decisions present an interesting risk assessment question: is it worthwhile to advise a client to disclose publicly recent internal audits and investigations to shield against later qui tam suits, or instead should clients keep such matters private to avoid any potential public relations backlash?

Doctors are smart folks who want to do the right thing for their patients. By and large, they want more information, not less. By and large, they respect the wishes of their patients. Ask any doctor if she would have wanted to know additional safety information when prescribing a medicine or medical device and the answer almost always is yes. Ask her if she would honor a patient’s decision not to take a prescription medicine or use a medical device and the answer almost always is yes.

In a failure to warn case, plaintiffs often rely on these two obvious and easily-elicited admissions to side step the learned intermediary doctrine. The dance goes like this.

First, the Plaintiff testifies, my word, had my doctor told me about this additional risk information, I never would have taken this drug or used this medical device. Of course, Plaintiff invariably delivers this testimony while actively using an alternative medicine or device that carries the very same risk as the medicine or device that is the subject of the litigation.

Next, Plaintiff’s counsel turns to the prescribing physician and marches through this simple Q and A:

Plaintiff’s counsel: “Doctor, wouldn’t you have wanted to know X, when prescribing this medicine?”

Prescriber: “Yes, I would have wanted to know.”

Plaintiff’s counsel: “And Doctor, if you had known X, would you have told my client prior to prescribing this medicine?”

Prescriber: “Yes, I probably would have taken it into consideration and may have discussed it with the patient.”

Plaintiff’s counsel: “And if my client said she did not want to take this medicine, knowing X, would you have honored her wishes and prescribed an alternative?”

Prescriber: “Yes.”

“Ah ha!” they exclaim. “We’ve established causation – in the face of a different warning, my client would not have taken the medicine/used the medical device. We’ve defeated summary judgment and get to a jury.”

Not so fast, says the Fourth Circuit.

Earlier this month, in Lewis v. Johnson & Johnson, App. No. 14-1244, 2015 WL 860371 (4th Cir. March 2, 2105), the Fourth Circuit upheld summary judgment on Plaintiff’s failure to warn claim regarding alleged injuries associated with the use of a vaginal mesh device. The court explicitly rejected Plaintiff’s attempt to side step the learned intermediary doctrine by arguing that a stronger warning would have caused her to withhold consent for the procedure. The Fourth Circuit made clear that in a failure to warn case, the inquiry is into whether a stronger warning would have changed the prescriber’s decision to prescribe, not the plaintiff’s decision to give consent.

“[T]he relevant test is whether the ‘alleged inadequacy caused [the plaintiff’s] doctor to prescribe the drug’ … courts must look to the prescribing doctor’s behavior in deciding whether the inadequate warning is the ‘producing cause’ of plaintiff’s injury … the inquiry under Texas law remains whether the warning would have changed the decisionof the prescribing physician.” Id. at *1 (emphasis added and internal citations omitted). Tripping up the plaintiff’s familiar dance steps, the Fourth Circuit held that the prescribing physician’s testimony that she might have passed additional information on to the Plaintiff and the Plaintiff’s testimony that she would not have consented to the procedure in the face of that additional information wasn’t enough to defeat summary judgment.

It’s the right result. By attempting to shift the focus away from the physician and onto the patient, plaintiff’s side step ignores the reality of a patient’s relationship with her physician and, indeed, the entire premise of the learned intermediary doctrine. It is the job of a physician, as the learned intermediary, to make sense of all the risk and benefit information and to use his or her independent medical judgment to apply that information to a patient’s individual medical care. We rely on and expect our doctors to do just that. If not, why else would anyone ever seek the advice of a doctor?

Consistent with the learned intermediary doctrine, warnings are therefore directed to physicians, not patients. Warnings are intended to supply physicians with the information they need to make treatment decisions. Physicians are not, as plaintiffs would like to characterize them, mere conduits of information. The warnings are directed to them and not their patients. What matters is whether a doctor, based upon the information at issue, would have made a different prescribing decision, not whether a patient would have made a different consent decision. The Fourth Circuit got it right.

The past few posts here at the Monitor have been devoted to expert issues, so why not keep the streak alive, albeit with a twist? We wanted to call your attention to a recent ruling out of the Eastern District of Michigan in which the court excluded an expert and rebuked counsel for its role in drafting the expert’s report. See Numatics, Inc. v. Balluff, Inc., No. 2-13-cv-11049, 2014 WL 7211167, at *7 (E.D. Mich. Dec. 16, 2014) (Lawson, J.). The case serves as a cautionary tale, reminding counsel to heed the letter and intent of the Federal Rules when working with experts.

First, some background. The plaintiff, Numatics, Inc., filed a patent infringement suit against Balluff, Inc. and H.H. Barnum Company alleging infringement of a patent on a system intended to control the opening and closing of hydraulic and pneumatic valves. The defendants retained a technical expert to provide opinion testimony in support of their invalidity defenses. The expert submitted a report in which he asserted that the claims in the Plaintiff’s patent were obvious in light of various prior art references. The plaintiff responded by, inter alia, moving to exclude the expert’s report, asserting that it had been drafted by defense counsel. In an astounding move, defense counsel conceded that they drafted the expert’s report. Perhaps not surprisingly, things went downhill from there.

On the bright side, the court found the expert to be competent in the field of the asserted patent. That victory, however, was Pyrrhic, because the court also concluded that the expert “had surrendered his role to defense counsel, and that is not how the adversary process works.”Id. at *4. As the court noted, Rule 26 of the FRCP states that expert testimony “must be accompanied by a written report––prepared and signed by the witness.” Id. at *5 (quoting Fed. R. Civ. P. 26(a)(2)(B)) (emphasis in original). The court further stated that even though an expert may not grasp all the required components of an expert report, it is impermissible under Rule 26 for counsel to draft the expert’s report and then ask the expert to sign it. Dispensing with the usual judicial pleasantries, the court labeled the defendants’ expert a “highly qualified puppet,” faulting him for spending just eight hours reviewing his report before signing his name. The court also assailed the expert for taking only two or three hours to purportedly review 2,600 pages of deposition transcripts, and for spending less than 30 hours developing his opinions, nearly half of which were spent traveling for the case. The coup de grace (beyond counsel’s admitted ghost writing), though, was the court’s observation that the expert’s report was identical to invalidity contentions disclosed by the defendant several months before the expert signed his report. The court thus concluded that the defendants had violated Rule 26 and Rule 37 required excluding the expert from the case.

This may be a good time for some takeaway lessons. Numatics is a reminder that counsel should educate the expert about, and be mindful of, the strictures of Rule 26. In particular, counsel must remember that he or she is allowed to assist the expert in the fine tuning of his or her report, but may not take a significant role in drafting the report. The report must reflect the expert’s own thoughts and opinions. Counsel should also explain to the expert the importance of properly documenting time spent reviewing materials and preparing the report. The expert should understand that time entries may be scrutinized as evidence of the amount of effort that he/she has devoted to the report.

Our suggestions may seem rudimentary and self-evident. Numatics, however, suggests that it’s never a bad time for practitioners to refresh their memory about the basics.

As a parent, sometimes the best (or only) answer you have for your kids is “Because I said so.” Fortunately as defense counsel in products liability cases, the law requires that plaintiff’s experts actually have some basis for his or her opinion. Ipse dixit should not be enough. Good news out of the state of Virginia. Recently, the state Supreme Court overturned a large jury verdict that was based on improper (“ipse dixit”) expert testimony. Hyundai Motor Company, Ltd. v. Duncan, 766 S.E.2d 893 (Va. 2015).

The case involved tragic facts which often can lead to tragic verdicts. The plaintiff sustained a serious head injury while driving a 2008 Hyundai when he lost control of the car and ultimately hit a tree on the driver’s side. Although the car was equipped with a side airbag, it did not deploy, and he sued Hyundai for breach of the implied warranty of merchantability on grounds the car was unreasonably dangerous. The plaintiff called an expert mechanical engineer who was permitted to testify that the side airbag should have been placed in a different location where it would have deployed and prevented the injury. The jury was apparently impressed by the testimony and returned a $14 million verdict.

The Virginia Supreme Court reversed and entered judgment for Hyundai. The Court carefully scrutinized the expert’s testimony and concluded it amounted to little more than “Because I said so.”

At trial, the expert’s principal conclusion was that Hyundai should have placed the sensor for the side airbag on the pillar on the driver’s side door and approximately 4 to 6 inches from the floor, which he believed would have resulted in the deployment of the airbag. In contrast, the sensor had actually been placed underneath the driver’s seat.

Interestingly, the expert conceded that Hyundai would have complied with the law had it not even had a side airbag, but opined that once you advertise you have one, it ought to work as intended. Point taken, perhaps.

In any event, the fundamental problem with this expert’s testimony is that he never tested his hypothesis that the sensor would have worked had it been moved to his chosen location. In fact, he relied on Hyundai’s own engineering study where it had analyzed 14 potential locations for the sensor – but Hyundai did not test the location he chose. The closest it came was to one spot on the pillar on the driver’s side door but that was 10-12 inches from the floor, not the 4 to 6 he believed would have saved the plaintiff. The expert chose the pillar as the appropriate spot because Hyundai’s own study showed that the sensor on the pillar at the spot 10-12 inches above the floor had a much a “better signal” than the spot Hyundai ultimately selected. On the back of essentially only that finding, the expert was permitted to testify that his chosen location would have prevented the injury.

However, on cross-examination the expert admitted “that the crash sensing system depends upon a combination of the structure of the vehicle, the sensors themselves, and an algorithm, but he did not perform any tests to determine whether a different sensor location, structure, or algorithm would have caused the side airbag to deploy in [plaintiff’s] crash.” In other words, there is simply more to the analysis that where the signal is strongest. The expert admitted all of those factors matter, but yet he ignored nearly all of them.

Presumably, Hyundai chose its location based on an analysis of all of the relevant factors. The opinion is silent as to why Hyundai chose the location it did and also why the expert did not simply choose a location that Hyundai tested as the more appropriate one. One can only guess that Hyundai’s study showed its chosen location was the best one and the expert could not challenge the study’s finding. So, instead, he hypothesized that a yet untested location was actually the best one of all.

As a result, the Virginia Supreme Court concluded that the expert’s conclusions were not reliable. The court was impressed that he admitted that “I have not done any tests . . . nor have I done any serious calculations. What I’ve done is look at the signal at the []pillar and the signal at the location and concluded that I got a much more robust and timely signal at the []pillar.” And he further admitted that the smallest difference in location (even less than an inch) could be critical, but, he selected a location that was more than 4 inches away from any location that had ever been tested before. He did not have a testable theory. He had only his own untested hypothesis.

That should not be enough under any standard, whether Daubert or otherwise. And the Virginia State Supreme Court held that the expert’s “opinion that the vehicle was unreasonably dangerous was based on his ipse dixit assumption that the side airbag would have deployed in [plaintiff’s] crash if the sensor had been located on the [] pillar. But the ‘analytical gap’ between the data [the expert] relied upon from Hyundia’s location study and the opinion he proffered was ‘simply too great.’” (internal citations omitted).

“Because I said so” can win a debate with your kids but it cannot prevent a $14 million verdict from being overturned in Virginia.

As my colleague recently discussed, humanizing a corporation is a critical element of any products liability defense strategy. After all, when an individual plaintiff is pitted against a corporate defendant in the courtroom, getting a jury to sympathize with the corporation is often an uphill battle. But, as a Delaware Chancery Court ruling clarified last week, defense counsel can only go so far in portraying a company as a human being, specifically when it comes to expert testimony.

The court’s ruling that expert witnesses must possess “a body and brain” to render testimony may be a clever way of prohibiting parties from designating corporate entities as witnesses, but it also serves as a good reminder of the key challenges litigators often face in presenting experts to testify. Namely, that witnesses be able to testify from their own personal knowledge, take an oath, hear from other witnesses, and – perhaps most critically – undergo cross-examination.

By way of background, Dole Food Co. Inc. had sought to name financial services firm Stifel Nicolaus & Co. as its expert witness in a shareholder suit brought against Dole stemming from claims related to the pineapple producer’s $1.6 billion take-private deal. Although it is not unusual for parties to present corporate entities as experts, typically they do so in conjunction with naming individual experts – something Dole chose not to do here. In fact, during a deposition, Dole defense counsel objected when Stifel’s managing director identified himself as the author of Dole’s valuation report, saying instead that “‘Stifel is the expert,’” Friday’s opinion noted.

Although the financial services firm produced reports about Dole’s value at the time of the transaction at issue, the court ruled that expert witnesses must be biological persons. “[The managing director] has a body and a brain,” Vice Chancellor J. Travis Laster wrote. “Assuming he is otherwise qualified, he can serve as an expert witness. Stifel has neither and cannot.”

Plaintiffs’ counsel had challenged Dole’s designation of Stifel as its expert on the grounds that a corporate entity could purport to rely on the collective wisdom of its employees and agents, whereas individuals can rely only on their own limited knowledge and experience.

One can certainly imagine how it would be difficult for a jury to evaluate the credibility of such “collective wisdom.” But more importantly, designating a corporation as a witness would enable a party to circumvent a crucial component of expert testimony – cross-examination. In many cases, less-than-stellar experts can survive Daubert challenges on the basis that opposing counsel will have the opportunity to question their qualifications and opinions in front of a jury, thus empowering the jury to give the testimony whatever weight they deem appropriate. Without the cross-exam safeguard in place, it is unclear how the court could prevent less-than-scientific testimony from unduly swaying or confusing a jury.

However, the Dole court’s ruling, while instructive, would perhaps have had more teeth had the vice chancellor not simply substituted the managing director for the investment bank as Dole’s expert witness. This is particularly so given that the managing director authored the company valuation reports and will presumably be able to render nearly identical opinions as Stifel would have without sacrificing substance or credibility. Indeed, given my colleague’s reasoning as to why juries prefer humans over companies, the director himself may have even more success in testifying than Stifel would have.

Nevertheless, the court’s opinion is significant from a slightly different angle in that it pushes back, however gently, against the notion of “corporate personhood” that has taken hold after landmark decisions, such as the U.S. Supreme Court’s Citizens United and Hobby Lobby, expanded the political rights of corporations. Thus, while it could remain uncontroversial that a testifying expert witness must possess both “body and brain,” the Delaware Chancery Court’s ruling may reignite a conversation about where exactly we draw the line in humanizing the corporation.

In yet another decision reflecting the crucial role that expert testimony on causation plays in pharmaceutical cases (see here), a New Jersey State Judge recently excluded two plaintiff experts whose testimony sought to connect the acne medication Accutane to Irritable Bowl Disease (“IBD”), particularly Crohn’s disease (“CD”). Given that this case is one of approximately 6,700 related cases that plaintiffs filed against Hoffman-La Roche Ltd., the Judge instructed defendants to submit a list of related cases that his ruling might affect.

The Court’s opinion followed a hearing examining the expert testimony of four witnesses under the New Jersey standard articulated in Kemp v. State of New Jersey, 174 N.J. 412 (2002). As Judge Nelson Johnson explained, a Kemp hearing applies a flexible inquiry that examines whether an expert can identify the factual basis for his conclusion, explain his methodology, and demonstrate that both are scientifically reliable, even if the expert’s opinion is not generally accepted by his peers.

Though acknowledging that the four witnesses examined at the Kemp hearing, including the two excluded witnesses, are “exceptionally learned and accomplished professionals,” the Court still found that the experts were “highly selective, looking no further than they wanted to – cherry picking evidence – in order to find support for their conclusion-driven testimony in support of a hypothesis made of disparate pieces, all at the bottom of the medical evidence hierarchy.” Indeed, the Court explained that the opinions of one of the experts were not “‘methodology based,’ but rather are conclusion-driven. This is an expert on a mission. As cautioned by our Supreme Court, trial courts must attend to ‘the hired gun phenomenon.’” The Court, noting that its review of the scientific literature did not reveal a single study that set out a precise biological mechanism for the development of IBD and CD, firmly stated that: “It is one thing to stand alone in the world of science, advancing a hypothesis that others do not accept. It is quite another thing to advance a hypothesis that can only be supported by disregarding valid scientific research.”

The New Jersey court’s opinion has potentially enormous implications on the thousands of cases that have been brought alleging that Accutane causes CD. In any event, the case provides us with yet another affirmation that disputes over expert testimony are—and should remain—at the forefront of any litigation strategy.

Whether cities and towns can regulate hyrdaulic fracturing, or “fracking,” through zoning or permitting ordinances has been a hot topic over the past several years. Pennsylvania’s and New York’s highest courts have both ruled that localities in the respective states have the right to enact zoning regulations that effectively ban fracking. In contrast, a Colorado judge overturned a Colorado town’s five-year moratorium, ruling that the moratorium violates the Colorado Oil and Gas Conservation Act, which prioritizes the development of natural resources. Meanwhile, the validity of local bans is currently being litigated in Texas. Just this week we also blogged about a New Mexico federal court’s ruling striking down a local ordinance.

In contrast to the rulings in Pennsylvania and New York, the Ohio Supreme Court ruled last week that local towns cannot pass zoning or permitting ordinances that conflict with the state’s authorization of fracking. The defendant in the case was an energy company that had received a state permit to conduct fracking activities on private property within the town of Munroe Falls. Munroe Falls sued the energy company because the company did not obtain a local permit. The town argued that the local permitting ordinances were an exercise of the town’s “home rule” powers, that is, an exercise of local self-government. The town argued that its regulations were therefore protected by the Home Rule Amendment to the state constitution.

On appeal to the Ohio Supreme Court, the high court found for the defendant energy company, invalidating the local ordinance. In a 4-3 decision, the court ruled that the local ordinance was an exercise of the town’s police power, not its home rule powers, and thus that it was not protected by the Home Rule Amendment. Moreover, the court ruled that local permitting ordinances are preempted by the state’s oil and gas law, Ohio Revised Code 1509.02, which gives the state “sole and exclusive authority” over the permitting process.

Comparing the rulings in Colorado and Ohio to those in New York and Pennsylvania, the courts have overturned local bans where there is a clear indication from the state legislature that oil and gas development is a high state priority, such as through the Colorado Oil and Gas Conservation Act or Ohio Revised Code 1509.02. The existence of this type of declaration of legislative intent will likely continue to be a prominent factor in forthcoming court battles over the legality of local regulations. We will continue to monitor how this issue plays out across the United States, especially as the legal battle over local ordinances heats up in Texas.